IDEAS home Printed from https://ideas.repec.org/a/eee/reveco/v45y2016icp400-416.html
   My bibliography  Save this article

Technology, trade and ‘urban poor’ in a general equilibrium model with segmented domestic factor markets

Author

Listed:
  • Mukherjee, Soumyatanu

Abstract

Drawing on the evidence from Indian provinces, this paper, using a four-sector general equilibrium model with segmented domestic labour and capital markets, proposes that factor-specific technological progress only in the capital-intensive segment of the urban formal sectors may affect the urban informal workers adversely, while a trade induced progress in the vertically integrated skill-intensive formal sector benefits them. The numerical analysis further illuminates the importance of credit-product inter-linkage to channel the impact on urban informal wage. Such analysis also helps to infer the well-being of the urban poor, given its strong association with the trends in informal wages.

Suggested Citation

  • Mukherjee, Soumyatanu, 2016. "Technology, trade and ‘urban poor’ in a general equilibrium model with segmented domestic factor markets," International Review of Economics & Finance, Elsevier, vol. 45(C), pages 400-416.
    • Handle: RePEc:eee:reveco:v:45:y:2016:i:c:p:400-416
    DOI: 10.1016/j.iref.2016.07.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1059056016300570
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.iref.2016.07.003?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Petia Topalova, 2010. "Factor Immobility and Regional Impacts of Trade Liberalization: Evidence on Poverty from India," American Economic Journal: Applied Economics, American Economic Association, vol. 2(4), pages 1-41, October.
    2. Ronald W. Jones, 2018. "“Protection and Real Wages”: The History of an Idea," World Scientific Book Chapters, in: International Trade Theory and Competitive Models Features, Values, and Criticisms, chapter 6, pages 93-108, World Scientific Publishing Co. Pte. Ltd..
    3. Marjit, Sugata, 2003. "Economic reform and informal wage--a general equilibrium analysis," Journal of Development Economics, Elsevier, vol. 72(1), pages 371-378, October.
    4. Hamid Beladi & Sarbajit Chaudhuri & Shigemi Yabuuchi, 2008. "Can International Factor Mobility Reduce Wage Inequality in a Dual Economy?," Review of International Economics, Wiley Blackwell, vol. 16(5), pages 893-903, November.
    5. Jones, Ronald W., 2003. "Joint outputs and real wage rates," International Review of Economics & Finance, Elsevier, vol. 12(4), pages 513-516.
    6. Oladi, Reza & Beladi, Hamid, 2009. "Market interconnection and wages," Economics Letters, Elsevier, vol. 105(1), pages 117-119, October.
    7. Hamid Beladi & Lynda De la Vina & Sugata Marjit, 2012. "Technological Progress with Segmented Labor Markets," Review of Development Economics, Wiley Blackwell, vol. 16(1), pages 148-151, February.
    8. Manash Gupta, 1994. "Duty-free zone, unemployment, and welfare a note," Journal of Economics, Springer, vol. 59(2), pages 217-236, June.
    9. Mukherjee , Soumyatanu, 2014. "Liberalisation and Jobless Growth in Developing Economy," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 29, pages 450-469.
    10. Koujianou Goldberg, Pinelopi & Pavcnik, Nina, 2003. "The response of the informal sector to trade liberalization," Journal of Development Economics, Elsevier, vol. 72(2), pages 463-496, December.
    11. Basu, Kaushik & Bell, Clive, 1991. "Fragmented duopoly : Theory and applications to backward agriculture," Journal of Development Economics, Elsevier, vol. 36(2), pages 145-165, October.
    12. Marjit, Sugata & Kar, Saibal & Chaudhuri, Sarbajit, 2011. "Recession in the skilled sector and implications for informal wage," Research in Economics, Elsevier, vol. 65(3), pages 158-163, September.
    13. repec:adr:anecst:y:2005:i:79-80:p:12 is not listed on IDEAS
    14. Ronald Findlay, 1978. "Relative Backwardness, Direct Foreign Investment, and the Transfer of Technology: A Simple Dynamic Model," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 92(1), pages 1-16.
    15. Jones, Ronald W., 1996. "International trade, real wages, and technical progress: The specific-factors model," International Review of Economics & Finance, Elsevier, vol. 5(2), pages 113-124.
    16. Kalyan K. Sanyal & Ronald W. Jones, 2018. "The Theory of Trade in Middle Products," World Scientific Book Chapters, in: International Trade Theory and Competitive Models Features, Values, and Criticisms, chapter 13, pages 203-231, World Scientific Publishing Co. Pte. Ltd..
    17. Marjit, Sugata & Kar, Saibal & Acharyya, Rajat, 2007. "Agricultural prospects and informal wage in general equilibrium," Economic Modelling, Elsevier, vol. 24(3), pages 380-385, May.
    18. Ronald W. Jones, 2018. "The Structure of Simple General Equilibrium Models," World Scientific Book Chapters, in: International Trade Theory and Competitive Models Features, Values, and Criticisms, chapter 4, pages 61-84, World Scientific Publishing Co. Pte. Ltd..
    19. Vinoj Abraham, 2010. "The Effect of Information Technology on Wage Inequality: Evidence from Indian Manufacturing Sector," Working Papers id:3180, eSocialSciences.
    20. Dominik H. Enste & Friedrich Schneider, 2000. "Shadow Economies: Size, Causes, and Consequences," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 77-114, March.
    21. Charles R. Hulten & Sylaja Srinivasan, 1999. "Indian Manufacturing Industry: Elephant or Tiger? New Evidence on the Asian Miracle," NBER Working Papers 7441, National Bureau of Economic Research, Inc.
    22. Kar, Saibal & Marjit, Sugata, 2009. "Urban informal sector and poverty," International Review of Economics & Finance, Elsevier, vol. 18(4), pages 631-642, October.
    23. Mukherjee, Soumyatanu, 2012. "Revisiting the Apparent Paradox: Foreign Capital Inflow, Welfare Amelioration and ‘Jobless Growth’ with Agricultural Dualism and Non-traded Intermediate Input," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 27, pages 123-133.
    24. Friedrich Schneider & Dominik Enste, 1999. "Shadow Economies Around the World - Size, Causes, and Consequences," CESifo Working Paper Series 196, CESifo.
    25. Eli Berman & Rohini Somanathan & Hong W. Tan, 2010. "Is Skill-Biased Technological Change Here Yet? Evidence from Indian Manufacturing in the 1990s," NBER Chapters, in: Contributions in Memory of Zvi Griliches, pages 299-321, National Bureau of Economic Research, Inc.
    26. Chaudhuri, Sarbajit & Banerjee, Dibyendu, 2008. "Fair Wage Hypothesis, International Factor Mobility and Skilled-Unskilled Wage Inequality in a Developing Economy," MPRA Paper 9303, University Library of Munich, Germany.
    27. Krugman, Paul R., 2000. "Technology, trade and factor prices," Journal of International Economics, Elsevier, vol. 50(1), pages 51-71, February.
    28. Ronald Findlay & Ronald W. Jones, 2018. "Factor Bias and Technical Progress," World Scientific Book Chapters, in: International Trade Theory and Competitive Models Features, Values, and Criticisms, chapter 11, pages 167-173, World Scientific Publishing Co. Pte. Ltd..
    29. Pattnayak, Sanja S. & Thangavelu, S.M., 2005. "Economic reform and productivity growth in Indian manufacturing industries: an interaction of technical change and scale economies," Economic Modelling, Elsevier, vol. 22(4), pages 601-615, July.
    30. Marjit, Sugata & Kar, Saibal, 2007. "Labor productivity growth, informal wage and capital mobility: A general equilibrium analysis," MPRA Paper 23912, University Library of Munich, Germany, revised 2008.
    31. Murat Seker & Daniel Rodriguez Delgado & Mehmet Fatih Ulu, 2015. "Imported Intermediate Goods and Product Innovation : Evidence from India," Working Papers 1537, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
    32. Sarbajit Chaudhuri & Ujjaini Mukhopadhyay, 2010. "Revisiting the Informal Sector," Springer Books, Springer, number 978-1-4419-1194-0, September.
    33. Asha Sundaram & Reshad Ahsan & Devashish Mitra, 2012. "Complementarity between Formal and Informal Manufacturing in India: The Role of Policies and Institutions," Working Papers 1116, School of International and Public Affairs, Columbia University, revised Apr 2012.
    34. Sugata Marjit & Saibal Kar & Hamid Beladi, 2007. "Trade Reform and Informal Wages," Review of Development Economics, Wiley Blackwell, vol. 11(2), pages 313-320, May.
    35. Sarbajit Chaudhuri, 2003. "How and how far to liberalize a developing economy with informal sector and factor market distortions," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 12(4), pages 403-428.
    36. Chaudhuri, Sarbajit & Mukhopadhyay, Ujjaini, 2009. "Revisiting the Informal Sector: A General Equilibrium Approach," MPRA Paper 52135, University Library of Munich, Germany.
    37. Ethier, Wilfred J., 2005. "Globalization, globalisation: Trade, technology, and wages," International Review of Economics & Finance, Elsevier, vol. 14(3), pages 237-258.
    38. Hasan, Rana, 2002. "The impact of imported and domestic technologies on the productivity of firms: panel data evidence from Indian manufacturing firms," Journal of Development Economics, Elsevier, vol. 69(1), pages 23-49, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Soumyatanu Mukherjee, 2016. "Opening the Pandora's Box – Liberalised Input Trade and Wage Inequality with Non-traded Goods and Segmented Unskilled Labour Markets," Discussion Papers 2016-15, University of Nottingham, GEP.
    2. Mukherjee, Soumyatanu, 2017. "Input trade reform and wage inequality," International Review of Economics & Finance, Elsevier, vol. 51(C), pages 145-156.
    3. Broll, Udo & Mukherjee, Soumyatanu, 2017. "International trade and firms' attitude towards risk," Economic Modelling, Elsevier, vol. 64(C), pages 69-73.
    4. Udo Broll & Soumyatanu Mukherjee, 2016. "International trade and risk aversion elasticities," Discussion Papers 2016-17, University of Nottingham, GEP.
    5. Soumyatanu Mukherjee & Shreya Banerjee, 2018. "Implications of Trade policies in segmented factor markets – A general equilibrium approach," Discussion Papers 2018-01, University of Nottingham, GEP.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mukherjee, Soumyatanu & Zafar, Sameen, 2014. "Technological progress with segmented factor markets and welfare implications for the urban poor," MPRA Paper 55297, University Library of Munich, Germany.
    2. Soumyatanu Mukherjee, 2016. "Opening the Pandora's Box – Liberalised Input Trade and Wage Inequality with Non-traded Goods and Segmented Unskilled Labour Markets," Discussion Papers 2016-15, University of Nottingham, GEP.
    3. Soumyatanu Mukherjee, 2015. "Input Trade Liberalisation and Wage-inequality with Non-traded Goods," Discussion Papers 2015-05, University of Nottingham, CREDIT.
    4. Chaudhuri, Sarbajit & Mukhopadhyay, Ujjaini, 2009. "Revisiting the Informal Sector: A General Equilibrium Approach," MPRA Paper 52135, University Library of Munich, Germany.
    5. Mukherjee, Soumyatanu, 2017. "Input trade reform and wage inequality," International Review of Economics & Finance, Elsevier, vol. 51(C), pages 145-156.
    6. Marjit, Sugata & Mandal, Biswajit, 2010. "Extortion and Informal Sector in a Small Open Economy," MPRA Paper 25044, University Library of Munich, Germany.
    7. Mandal, Biswajit & Chaudhuri, Saswati, 2010. "Informal Wage, Informal Price and Extortion under Migration and Tariff Reform," MPRA Paper 28704, University Library of Munich, Germany.
    8. Soumyatanu Mukherjee, 2016. "Tariffs, FDI with technology transfer and welfare in segmented factor markets," Working papers 190, Indian Institute of Management Kozhikode.
    9. Mandal, Biswajit & Roy, Sangita, 2017. "Trade liberalization, Skilled Intermediate input and Wage Distribution," MPRA Paper 87459, University Library of Munich, Germany.
    10. Mukherjee, Soumyatanu, 2013. "Sector-specific foreign direct investment, factor market distortions and non-immiserising growth," MPRA Paper 52214, University Library of Munich, Germany.
    11. Chaudhuri, Sarbajit & Gupta, Manash Ranjan, 2014. "International factor mobility, informal interest rate and capital market imperfection: A general equilibrium analysis," Economic Modelling, Elsevier, vol. 37(C), pages 184-192.
    12. Saibal Kar, 2016. "Do economic reforms hurt or help the informal labor market?," IZA World of Labor, Institute of Labor Economics (IZA), pages 263-263, June.
    13. Mandal, Biswajit & Roy, Sangita, 2016. "Trade liberalization and wage distribution when skilled intermediate input is used in import competing sector that uses a commom type of capital," MPRA Paper 87460, University Library of Munich, Germany.
    14. Marjit, Sugata & Kar, Saibal, 2009. "Emigration, Wage Inequality and Vanishing Sectors," MPRA Paper 19354, University Library of Munich, Germany.
    15. Chaudhuri, Sarbajit, 2010. "Economic recession, demand constraint and labour markets in a developing economy," MPRA Paper 27433, University Library of Munich, Germany.
    16. Mitra, Sudeshna & Gupta, Kausik, 2017. "Liberalization and Welfare Conditions of a Developing Economy: A General Equilibrium Analysis," MPRA Paper 85230, University Library of Munich, Germany.
    17. Hamid Beladi & Saibal Kar & Sugata Marjit, 2013. "Emigration, Finite Changes and Wage Inequality," Economics and Politics, Wiley Blackwell, vol. 25(1), pages 61-71, March.
    18. Sugata Marjit & Saibal Kar, 2012. "Firm Heterogeneity, Informal Wage and Good Governance," Review of Development Economics, Wiley Blackwell, vol. 16(4), pages 527-539, November.
    19. Chaudhuri, Sarbajit & Gupta, Manash Ranjan, 2013. "Endogenous Capital Market Imperfection, Informal Interest Rate Determination and International Factor mobility in a General Equilibrium Model," MPRA Paper 51157, University Library of Munich, Germany.
    20. Traoré, Jean Abel & Ouedraogo, Idrissa Mohamed, 2015. "Public policies promoting the informal economy: effects on incomes, employment and growth in Burkina Faso," MPRA Paper 74760, University Library of Munich, Germany.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:reveco:v:45:y:2016:i:c:p:400-416. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620165 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.